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November 2011

Oddly, cleantech markets and social capital markets are barely aware of each other, despite obvious areas of complementary expertise. So I traipsed to San Jose to the Clean Tech Open Global Forum to interact with the very high quality CleanTech entrepreneurs, and those entities that fund them.

I have a project in mind to facilitate the bridging of these investment ecosystems that I hope will unlock further capital, but for now, let me simply report on some excellent startups I spoke with.

Impact investors would be interested in what I think of as Alchemy 2.0, and Regenerative Products

Waste (post-consumer, especially) to energy

Waste (post-consumer or industrial) to disaster recovery goods

Energy Grid-busters

Off-grid irrigation and energy solutions

Those companies in the gray area described below that add Social Entrepeneurial connection into the communities they serve, primarily via directly creating Green Jobs and providing education.

In this article, the assertion is that there aren't enough jobs, because jobs have been taken away by technology or by outsourcing work.

But... Isn't there plenty of work to do to clean up the environment (and possibly help people) around where you live or work? Who's paying people to do that? No one? Why not?

What's broken is structural. What's going on these days is an inability to identify what work needs to be done. This is because our measurement system for productivity making tchotchkies is out of alignment with what makes life worthwhile: lessening suffering and increasing creative expression, and those goods and services that enable these ends. But we don't measure suffering or wellbeing - we only measure profits. We assume that magically, entrepreneurs will design the right products - the products that the market demands.

But how are those market needs identified? How are investment decisions made? When we align those two questions with actual "first world" needs, we will see the resurgence of jobs.

Until then, due to our economic lack of imagination, we will remain reliant on creating goods for people who don't need them, just want them. "Want" describes a soft market. If we want firmer ground to stand on, we must do the difficult work of identifying what is needed.

1. Hydrovolts - I first saw them when they were a finalist in 2009. They have a non-solar off-grid energy solution. This is a microturbine that drops into a water canal. It's designed for extreme environments. These are smart experts who are solving the system of remote power generation issues and there is current demand for their product. They're looking to begin building their next round after the first of the year.

2. Growing Energy Labs, Inc. - They have an off- and on-grid solution for microenergy storage. They have a specific progression of ramp up for which they are seeking funding now. The executive team is polished, experienced, and highly educated.

3. Ventana - Moving further away from power generation, this is a fascinating technology within the world of waste->energy. In this case, mixed, unsorted plastics ("virgin waste") are converted to fuel. There is an 80-90% conversion rate. I can explain a bit more of the science in person, but the long story short is it's reasonable - basically they take very long hydrocarbon chains and "cut them up" into the length of fuels. The risks here are in scale-up and manufacturing. However the benefit is that it makes it cheap and less risky to mine landfills. I know this is not something particularly of interest, but it might be a good one to pass along. Amit Tandon is here through the weekend, resides near Delhi and I suspect is US-educated (very fluent verbally and culturally). Khosla Ventures was interested in him; I don't know if it would make a difference if they led the round. +91 1733 220087amit.tandon@ventanacleantech.com

4. Kiverdi - a bit further away is Kiverdi, which uses microorganisms to tune refining reactions, taking waste syngas and creating useable chemicals out of that. I mention it because it was very interesting. The CEO is Lisa Dyson. She has a PhD in physics from MIT, is very personable and professional, is a woman, and is black, so definitely worth keeping on the radar in general. lisa.dyson@iverdi.com510 394 4443. Based in SF.

Out of public companies only, in everything related to advanced materials (nanotech, solar, etc.), my gig was to pick something related to alternative energy. They needed to buy and hold for 3 years. After a few months of analysis, I picked AMSC, which produces superconductive wire and products that incorporate it. They were not profitable yet. Very few analysts covered them, possibly because understanding superconductivity does require some fairly specific knowledge. The ROI was around 190%. This was from 2006-2009.

It has come to my attention YET AGAIN that many feel that Millenials (b. 1981-2001) have a sense of entitlement; that they expect too much.

While I'm sure there are those within the generation who fit that mold, I disagree with its overarching characterization of the generation.

Every generation has its own culture. Individuals may or may not strongly identify with it (or identify much at all), and after all they might consider a different culture to be more relevant to them on a personal level (i.e. country-of-origin, socio-economic, professional - "jock" vs. "nerd", etc.)

Because every generation has its own culture, interactions between generations can be misunderstood in exactly the same way any representatives from any two different cultures might misunderstand each other: they look at each other through the lens of their own context.

Specifically in the case of Millenials, they were nurtured in groups. Watching Millenials as kids - they were like a litter of puppies: They were put onto project teams as early as preschool; my son actually took group final exams in high school. They were shoved into clubs and sports teams and then told to found their own in the competition to get into good colleges. They formed ad hoc "startups" with their roommates, and many of these lasted long enough to do at least one useful project. They want to land in big companies, do good for society, and generally approach life optimistically and positively. They BELIEVE in the concept of Social Contract.

Contrast this to the Baby Boomers and GenX: Boomers were encouraged to be individualistic. They revered the lone visionary, the breakthrough artist. They talk about and fought for personal freedoms. GenX were the ones who turned the tide, against unfettered individual excess but not willing to assume social cohesion, GenX were the kids who couldn't even trust the social contract their dad made with their mom... but because of that, they knew what it was, they valued it, and most of us spent our careers searching for ways to build that back in.

So what we've got here are Millenials - people who DEMAND that social contracts be honored. They're being evaluated by GenX and Boomers. There are GenX who either think they're spoiled ("Social contract? Dreamer!") or are misty-eyed that the world is being set right again ("You can trust? We've healed!")....and Boomers who are either used to heaping disdain on GenX and forgot to stop ("You made a bad choice? Whose fault is that? You disgust me!") or who are Shocked that their lovely, obedient children, who spent their childhood paying into the social contract by benignly taking parental advice, now have the expectation that they're to get something in return ("Well, there are no *promises*...") or continue to expect the social contract to work in their favor ("Oh you young people are so wonderful! Who wants an underpaid internship?")

Personally, I'm in the misty-eyed GenX group. I think Millenials demanding that they are considered part of the social fabric after following instructions and jumping through hoops is a healthy(ish) thing. I'm really sick of hearing about their sense of entitlement, when what we're actually saying is that their parents taught them to believe that if you are a team player, and you do what your team asks, you'll be rewarded. If greedy parents led those expectations to be too high, it's the parents' fault.

I think the Millenials are about to shock us all with their fierce allegiance to social cohesion and social justice. I think some GenX will come through as modern day Pattons, leading the Millenials through the ersatz minefields to get into a strong position from which to end the destruction of the planet.